Exercise :: Simple Interest - Important Formulas
The money borrowed or lent out for a certain period is called the principal or the sum.
Extra money paid for using other's money is called interest.
Simple Interest (S.I.):
If the interest on a sum borrowed for certain period is reckoned uniformly, then it is called simple interest.
Let Principal = P, Rate = R% per annum (p.a.) and Time = T years. Then
(i). Simple Intereest = P x R x T 100 (ii). P = 100 x S.I. ; R = 100 x S.I. and T = 100 x S.I. . R x T P x T P x R